How to divide a business between founders - the opinion of a lawyer

Yulia Kombarova, general director of the St. Petersburg Legal Bureau No. 1, said what actions could reduce losses if one of the founders of the company decided to go their own way.



Tip 1. Take the initiative



If you finally decided that with a partner or a group of partners you are not on the way, then take the initiative. Give reasons why the current situation is unacceptable and impedes the development of the company, identify the differences and suggest options for the division of the company. It is important here to impose on your partner a rhythm of action so that you are in an attacking position, and he is in a defensive position.



In our practice, there was an example when one of the founders, who held the position of commercial director, started having problems in the family and this affected his work: he canceled the meetings, did not keep his promises. Then, family problems passed to the stage of divorce with the courts, the division of real estate, he had even less time for business. Other founders recorded several disruptions in their work and proposed two options for the development of events: leaving with monetary compensation or dismissal and the subsequent division of the company. As a result, the first option was chosen.



Tip 2. What to do: split up a company or set up a legal entity



A company can be divided into two parts, or another legal entity can be distinguished from it. Isolation is an easier procedure; it is often carried out to optimize taxation or when dividing activities. When separating, in contrast to separation, licenses, various tolerances and permissions are retained, as they are issued to a specific legal entity.



In case of separation, the old legal entity remains in the market, and part of the rights, duties and part of the property are transferred to the new one. Allocation is suitable if there is a network of similar businesses that are easily divided. For example, a car wash network. Or, each of the founders of the business was engaged in its own unit, which can operate autonomously. For example, a company has a trade in goods and a warehouse for their storage.



Example: A group of shareholders was dissatisfied with the work of the managing director and part-time of a large shareholder, with a “blocking stake” in shares. Revenues fell, customer complaints about poor product quality became more frequent, and there was more defect. Other shareholders conducted an audit, during which many violations of the law were revealed: labor law, accounting, use of equipment that did not pass testing in the production of products.



The meeting of shareholders expressed no confidence in the managing director, he was offered to resign. As for the block of shares, it was decided to separate the second company from one operating company. As a result, two companies were formed: one was engaged in production, and the other was responsible for logistics.



Nevertheless, we recommend not separating, but separating. When separating, two new legal entities are formed, to which the assets of the old society are transferred according to the separation balance sheet. The main drawback of the allocation is the threat of creditors challenging this procedure. In our practice, judges often apply the provision of Clause 5, Article 60 of the Civil Code of the Russian Federation on joint and several liability of both companies, if one of them, after separation, decided to leave the market. Such a "sword of Damocles" will hang over companies for 3 years.



The cost of these procedures starts from 35 000 rubles, they take 3-4 months.



Tip 3. Fix the agreement



All agreements must be documented and executed in accordance with applicable law. Such actions will protect both from the “forgetfulness” of the partner, and from the possible interest of third parties in the future. You can involve a mediator, an external manager, a specialist in crisis management in the section procedure. This specialist should have an impeccable reputation and be convenient for all founders.



At the first stage of the section, a new charter of the company is written, an inventory is carried out, based on the results of which a transfer deed is drawn up. Notifications of an upcoming meeting are sent to all meeting participants (no later than 30 business days). Lawyers will tell you when and about what you need to notify state agencies, creditors, what documents are needed.



In our practice, there was a case when the two founders of the IT company did not want to work together and one of them initiated the separation of the company. It was quite difficult, as the company had several profitable projects and the degree of participation was evaluated subjectively. But all the same, the agreements were spelled out and part of the money, "compensation" was paid. But at the final stage, one of the founders suddenly changed his mind, unreasonably demanding a large share. A trial was held at which this participant demanded additional “compensation”. Justice helped to restore the correspondence by e-mail, the arrangements were notarized and presented to the court. As a result, the unscrupulous co-owner lost.



Tip 4. Without trial



Nevertheless, our advice is not to bring the matter to court. It is necessary to convince the second participant to come to an amicable agreement, because if the lawsuit does not destroy the company, it will cause huge damage to it. You will spend a lot of money on lawyers, at which time the company’s work will be frozen, and competitors will intercept clients. In addition, the court may pay attention to the state of the company. For example, Themis will begin to establish the reality of depositing funds in the authorized capital, establish persons controlling the company, to establish the real functions performed by each participant, call witnesses. All this can open the door to "skeletons in the closet" and can adversely affect the business reputation of society.



Tip 5. Control your emotions.



The stage of divorce can be painful, especially if you and your partner started a business together and went through all the crises. Do not let emotions overwhelm you, it is better to outline a flexible framework for negotiations, and the rest should be entrusted to authorized persons. This will help to avoid emotional decisions, but will not deprive you of control over the process.



In our practice, there was an example when one of the founders bribed an employee to carry out a provocation against another founder. In the New Year's corporate party there was a fight, the employee was broken nose. As a result, a criminal case was instituted against the founder’s brawler, he gave a written undertaking not to leave the place of residence. As a result, this founder was removed from the management of the company.



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